United States: Tax Policy Update - 13 October 2014

Last Updated: October 17 2014
Article by Russell W. Sullivan and Danielle R. Dellerson


George Clooney's age – can you believe that? More importantly, it's the percentage of Americans who disapprove of the job President Obama is doing according to the latest Gallup poll. With 21 days left until the midterm elections, Obama's low approval rating continues to be a liability for Democrats in competitive races across the country. All eyes are on the Senate races in Lousiana, Arkansas, and Alaska. Democrats must eke out a victory in at least one of these states in order to maintain control of the Senate.


Koskinen: Pass Extenders ASAP. Congress needs to act on tax extenders as soon as it returns for the lame-duck session in November to avoid delays in the 2015 tax season and the processing of tax refunds for millions of taxpayers, according to a letter from Internal Revenue Service Commissioner John Koskinen sent to Senate Finance Committee Chairman Ron Wyden (D-OR) last week.

Wyden issued a statement in response, calling on Congress to "act swiftly on these important tax provisions so it can get to work on a comprehensive overhaul of the tax code and lift the fog of uncertainty from taxpayers."

Republicans Ready to Negotiate? We expect to see movement from Senate Republicans to broker an agreement on extenders with their Democratic counterparts during the lame-duck session—regardless of the outcome of the midterm elections. Parameters of such a deal are not yet known, but there is a growing sense among Republican leaders and tax writers that putting off extenders until 2015—when many expect the GOP will hold majorities in both houses of Congress—would do too much economic and political damage.

Dynamic Scoring: Voodoo or Must-Do? New York Times columnist Paul Krugman recently wrote that we may "find ourselves in deep voodoo" if Republicans take over the Senate and use their control of both houses of Congress to change the legislative scoring rules used by the nonpartisan Joint Committee on Taxation (JCT). Krugman's pun refers to "voodoo economics," the derisive term used to describe Ronald Reagan's 1980 campaign contention that lowering top marginal tax rates would spur economic growth, paying for the cuts by making up for the lost revenue. The Tax Foundation provided an immediate critique of Krugman's analysis and a defense of so-called dynamic scoring, available here.

Rep. Paul Ryan (R-WI), the most likely successor to the helm of the House Ways & Means Committee in the next Congress, has declared his intention to change the JCT's scoring protocols to include the "macroeconomic effects" of tax reform proposals—which is a way to plug dynamic scoring without uttering a phrase that immediately raises political hackles. The Tax Policy Center also has an interesting take on the political dynamics of dynamic scoring, available here.


Just the FATCA. The Securities Industry and Financial Markets Association (SIFMA) hosted a symposium Oct. 6 and 7 to discuss the intricacies and implementation of the Foreign Account Tax Compliance Act (FATCA) rules. Panels focused on a diverse array of topics, including the future of FATCA, its impacts on global capital markets and the operational challenges of compliance. One highlighted issue was the key differences between the Common Reporting Standard (CRS) developed by the Organisation for Economic Co-Operation and Development (OECD) and the standard developed under FATCA. The U.S. took the initiative for worldwide information sharing with FATCA, but the OECD's reporting standard is different to reflect its applicability on an international scale. Because of the differences, the CRS and FATCA are not wholly compatible. One panelist saw this as a "high-profile issue" that needs legislative action to conform FATCA to the CRS. While the administration has proposed rules to conform with the CRS, Congress has not acted on it yet.

Dividend Equivalent Rule Set for End of Year Completion. Also during the FATCA symposium, an IRS official said that the agency is working to finalize rules aimed at curbing the ability of foreign investors to skirt the withholding tax on dividends under tax code Section 871(m) by the end of 2014.

EU Ministers Set to Vote on FATCA-Inspired Reporting Measures . European Union finance ministers are expected to vote Oct. 14 on a measure modeled after FATCA provisions requiring the automatic exchange of data about dividends, capital gains and other income generated from assets held in financial accounts. The EU measure also incorporates the Organization for Economic Cooperation and Development's (OECD) common reporting standards (CRS) that the OECD adopted in July. The measure requires unanimous consent of the 28 member states, and BloombergBNA reported that consensus is expected, according to an anonymous EU diplomat.


Former Swiss Bank Exec on Trial. In a pivotal case for the U.S. Department of Justice's anti-tax evasion program, the trial of Raoul Weil, a former top executive with Swiss bank UBS, begins tomorrow in a South Florida federal court. Weil is accused of overseeing the bank's program that helped 20,000 American clients hide $20 billion from the Internal Revenue Service (IRS). Those accusations led to a 2009 settlement agreement in which UBS paid a $780 million fine and turned over thousands of American clients' names to U.S. authorities. Read more here.


There are no relevant agency meetings scheduled for this week.

Congress is still out on the campaign trail, returning the week of Nov. 12.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.